After “Cyprus”, Bitcoin might just be the natural choice

After the ECB left Cyprus with no cash, Bitcoin value just kept growing. But can we trust this digital currency?

The newspapers of the last days show the images of a boat stuffed with Euro cash reaching the coast of Cyprus. The army is defending the harbor and soldiers guard the entrance of the banks. In a few days, Europe managed to leave a member of its Euro community in a complete state of desperation. Foreign capital left the country through dubious detours and people have just enough money for a piece of bread. If ever there was a sense of solidarity between EU members, this is fading away.

The Euro is a centralized currency where the supply side is controlled by the ECB to achieve stability of the currency value. The austerity programs that have been introduced in almost all European countries should lower government debts and discourage inflation pressures in Eurozone.  

But if ECB is putting all its effort to keep inflation under control, it forgot that a currency needs trust to survive. Cyprus may be a peculiar case. It is a country political divided between Greece and Turkey where Russian capital found its tax haven. Despite this, Cyprus became an example for many people, in Europe and outside, that a centralized currency has its Achilles heel. The monetary network providing money to Cyprus stopped working, leaving its citizens with little or no cash to spend.

But how can we defend our savings if banks cannot be trusted? The traditional way to keep capital from depreciation is buying silver of gold. It is not a surprise that silver and gold increases its value in economical crisis time. The last month, however, the market discovered another possibility. Bitcoin, the virtual currency, showed up into financial news with an incredible growth. In other words this virtual currency is winning the confidence of people worldwide.

 However, why should we trust Bitcoin, if we cannot even touch it? Bitcoin doesn’t have a centralized bank system. In this way Bitcoin can use the whole internet network to move from place to place. A network as internet is nearly impossible to put down. With the use of an encrypted “wallet” Bitcoins can be kept safe from thieves and hackers. With an expanding system of users, you can buy and sell Bitcoin in a very simple way. That enables you to reach your capital wherever you are. And finally, a very important property: Bitcoin is really anonymous: your mother-in-law will never know how much you’ve got in your “wallet”.